Cambridge

FTSE 100 closes firmly higher as prospect of lockdowns easing buoys sentiment

  • FTSE 100 index finishes 1.64% ahead
  • Admiral dips after withdrawing special dividend
  • Supermarkets and housebuilders out of favour

5.10pm: FTSE 100 finishes positively

FTSE 100 index closed convincingly higher on Monday as markets are more optimistic about the easing of lockdown restrictions amid the pandemic.

Britain's blue-chip benchmark finished up over 94 points, or 1.64%, at 5,846.

"In recent weeks, a number of countries have taken tiny measures to reopen certain aspects of their economies, and that has spurred speculation about other nations following suit," said David Madden, at CMC Markets.

"Overnight, the Bank of Japan made it clear they are likely to throw more money at the problem as the central bank removed the limit on its Japanese Government Bond purchases, and it is poised to buy more corporate bonds and commercial paper. This week we will hear from the Fed and the ECB, so traders will be wondering if the central banks will also reveal plans to stimulate their respective economies," he added.

Over on Wall Street, as traders brace for a raft of first quarter company earnings, the Dow Jones added over 271 points, while the S&P 500 gained nearly 35. The Nasdaq index added over 91 at 8,725.

3.45pm: Housebuilders and supermarkets left behind

More than 4mln UK workers have been furloughed, the chancellor of the Exchequer, Rishi Sunak told parliament today.

The finance minister also revealed that more than 20,000 coronavirus business interruption loans have so far been approved.

The FTSE 100 was up 65 points (1.1%) at 5,818.

Among the blue-chips not getting with the programme are supermarkets and housebuilders.

Car insurer Admiral Group PLC (LON:ADM) was another in the red, down 0.6% at 2,357p, after it withdrew plans to pay a special dividend.

3.05pm: US markets on the front foot

US markets have opened higher, albeit not as strong as expected, as US oil prices take another tonking.

The Dow Jones industrial average was up 149 points (0.7%) at 23,931 and the S&P 500 waa up 26 points (0.9% at 2,863.

On the futures market, the price of West Texas Intermediate (WTI) for June delivery looks like it is going the same way as the May contract – negative – with the contract down US$4.74 (28%) to US$12.23 a barrel.

investors dumping the Jun WTI contract. well i am so suprised….easiest short i've ever seen

— Neil Wilson (@marketsneil) April 27, 2020

Brent crude for June delivery, meanwhile, is faring a little better, down US$1.82 to US$19.62 a barrel.

In London, the FTSE 100 has had a bit of mid-afternoon dip, ebbing to 5,815, up 64 points (1.1%) on the day.

1.40pm: US markets set to get off to a flyer

A strong start is in store for Wall Street, in keeping with the global trend.

Spread betting quotes suggest the Dow Jones industrial average will open on or around 24,000, which would represent a rise of 225 points from Fridays close.

The S&P 500 is seen opening at 2,865, up 28 points.

“It's been a strong start to the week for global stock markets, with sentiment buoyed by more encouraging signs as countries around the world fight the coronavirus pandemic,” said Craig Erlam, the senior market analyst at OANDA Europe.

“Europe and North America have been the worst hit by the coronavirus so far but both are seeing improvements in new cases and deaths as the extreme lockdown measures bear fruit. We're by no way out of the woods, with a second wave almost inevitable in many people's eyes but this is encouraging and means we're a huge step closer to the re-opening of economies around the world,” he added.

Futures this morning.

✧ S&P 500 △ 0.89%
✧ Nasdaq △ 1.23%
✧ Russell 2k △ 1.92%
✧ Dow Jones △ 0.89% pic.twitter.com/Bo3uynQzd3

— Mad Labs Trading (@MadLabs6) April 27, 2020

In London, the FTSE 100 has been gently rising over the lunchtime trading session, hitting 5,842, up 90 points (1.6%).

US-focused tool hire firm Ashtead Group PLC (LON:AHT) leads the advance after a well-received trading update.

“Ashtead has weathered the first part of the current crisis rather well, buoyed by the fact its stores have been designated essential services and allowed to continue trading,” said Nicholas Hyett, an equity analyst at Hargreaves Lansdown.

“Rental revenue is lower but stable, and given the groups forecasting positive free cash flow in all its modelling that should provide some reassurance Ashtead will emerge from the current disruption in one piece.

“Having said that Ashtead is a cyclical business. While survival is a good starting point the group needs the economy, and construction sector in particular, to be on an even keel if its to thrive. While government spending on infrastructure is likely to increase in the short term, a boom in the wider construction sector looks like a big ask,” he added.

Ashteads shares were up 6.4% at 1,947.5p.

12.20pm: Footsie can't quite sustain a triple-digit rise

The FTSE 100 cant quite sustain a triple-digit gain and with sterling surging against the dollar is seeing its gains pared.

The FTSE 100 was up 80 points (1.4%) at 5,832.

On the foreign exchange markets, sterling has risen by three-quarters of a cent to US$1.2440, which wont please the many big dollar-earners in the Footsie.

Oil prices are on the slide again, with Brent crude for June delivery 82 cents cheaper at US$20.62 a barrel.

Oil giants BP PLC (LON:BP.) and Royal Dutch Shell (LON:RDSB) dont seem too fazed by the oil price weakness; the former is up 0.7% at 310.8p and the latter is 0.4% firmer at 1,353.6p.

Elsewhere in the oil sector, tiddler Aminex PLC (LON:AEX) topped the risers with a 45% increase to 0.725p after it formally received the extension of the Mtwara Licence from the Ministry of Energy of Tanzania, thus clearing one of the last obstacles to the signing of a farm-out agreement with ARA Petroleum Tanzania.

The company also announced that non-executive director Robert Ambrose has been appointed interim chief executive officer (CEO), replacing Tom Mackay.

On a day when the thinktank, the High Pay Centre, pointedly observed that FTSE 100 company that are claiming millions of pounds in government support for furloughed workers an average of £3.6mln before the coronavirus hit, Aminex scored a public relations hit with the news that Ambrose will take an annual salary of £60,000, compared to the £180,000 salary trousered by the previous CEO.

Sector peer Columbus Energy Resources PLC (LON:CERP), the oil and gas producer and explorer focused on onshore Trinidad and Suriname, was wanted after it said the Saffron well has discovered oil in the Lower Cruse and Middle Cruse, located in the South West Peninsula, onshore Trinidad.

Columbuss shares rose by a third to 2p.

We hope you saw our video presentation of the Saffron oil discovery and didnt miss the lower cruse energy visible at 05:55.https://t.co/CNsZrf9I1I#CERP #Saffron #SWP

— Columbus ERP (@Columbus_ERP) April 27, 2020

11.10am: Lockdown optimism drives markets

European markets are rising, apparently on hopes that lockdown restrictions will be eased.

The UKs prime minister, Boris Johnson, has said it is too early for the UK to contemplate easing up on the physical distancing restrictions but it is a reflection, perhaps, of the FTSE 100s international nature that the index is in step with other European indices, rising 93 points (1.6%) to 5,847.

“I know that there will be many people looking now at our apparent success and beginning to wonder whether now is the time to go easy on those social distancing measures,” the UK prime minister, Boris Johnson said in a speech this morning as he ruled out an early end to the UKs lockdown.

Not everyone was convinced that many people will be looking at “our apparent success” – or rather, not everyone was convinced that the UKs success has been apparent.

Boris Johnson just said many people will be looking at our apparent success in relation to Britain & Coronavirus.
Our death toll is heading to be the 2nd worst in the world.
This is not a success, Prime Minister – apparent or otherwise.

— Piers Morgan (@piersmorgan) April 27, 2020

Pantheon Macroeconomics daily coronavirus update noted that UK deaths are falling faster than new cases “as increased testing finds more cases”.

“Sweden's cases and deaths might now be peaking too, though the weekend data could yet be revised up. Clear success in Sweden, which has not imposed strict lockdowns, would be encouraging to other European countries and US states seeking to re-open,” said Pantheons Ian Shepherdson.

“US confirmed case growth rose 2.9% yesterday, the smallest increase since the crisis began, and down from a 3.6% rise on the same day last week,” Shepherdson reported.

“The number of reported new cases rose by 27.6K, slightly more than on the same day last week, but given that tests were up 53% over the same period, this is a good result,” he declared.

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One company that more than most would like to see lockdowns end sooner rather than later is hotels group Intercontinental Hotels Group PLC (LON:IHG).

The shares were up 4.6% at 3,518p after it revealed it had secured new financing to give it more liquidity and that it is an eligible issuer for the UK governments COVID corporate financing facility.

“In March IHG said hotel demand was at the lowest levels ever seen and todays results, unfortunately, support that. While RevPAR [revenue per available room] was down 25% in the first quarter overall, it was 55% lower in March, highlighting the real cost of lockdown on the business,” reported Emilie Stevens, an equity analyst at Hargreaves Lansdown.

“With earnings taking a real hit, its important IHGs improved its funding position with access to total liquidity of $2bn. Lending restrictions attached to IHGs borrowing have also been amended, providing the group which some much-needed breathing room, a minimum liquidity requirement of $400m has replaced all previous rules for now. IHGs also joined Whitbread in the UK governments COVID Corporate Financing pool too, borrowing £600m so far,” she added.

10.10am: Footsie adds to gains as Johnson's Damascene conversion continues

Things are getting strange in Westminster. The prime minister, Boris Johnson, has called on Britons to “contain your impatience” as the lockdown drags on.

“I refuse to throw away all the effort and the sacrifice of the UK people and risk a second major outbreak and huge loss of life and the overwhelming of the NHS,” said Johnson.

There was no mention this time in Johnsons speech of the “ancient inalienable British right to go down the pub”.

Johnson delivered his address outside 10 Downing Street, resisting the urge to shake hands with all and sundry on his way to the podium.

The prime minister said it would refine the current restrictions when the time is right and pledged that more details would be outlined “in the coming days”.

The FTSE 100 lengthened its gains following Johnsons speech, advancing to 5,850, up 98 points (1.7%).

"Contain your impatience… " pic.twitter.com/W81wx3FLVA

— R. (@alrhemist) April 27, 2020

9.30am: BP confirms it will go ahead with sale of its Alaska business

As is often the case, after a sharp initial movement the Footsie has moved into cruise mode.

Londons index of heavyweight shares was up 85 points (1.5%) at 5,838.

“Markets kicked off the week in a good mood thanks to a plethora of information about how certain countries plan to come out of lockdown and further central bank stimulus,” said Russ Mould, the investment director at AJ Bell.

“Investors are starting to be more hopeful that the virus has peaked in many parts of the world and so there will be a greater focus on reviving economies.

“The next two weeks should see businesses slowly start to reopen in places like Italy, Belgium and Switzerland, and there is talk that Australia may not be too far off the stage where it can begin to lift restrictions on public movement.

“The journey back to normality is likely to be very long but every small step towards getting people back to work and not stuck indoors should act as a positive catalyst for stock markets,” he added.

BP PLC (LON:BP.) was doing its bit to support the Footsie, with a 1.3% rise to 312.75p after it confirmed its commitment to completing the sale of its Alaska business to Hilcorp. The disposal was announced back in August of last year.

BP reconfirms intention to sell Alaskan business to Hilcorp despite market volatility@BP_plc @BP_Alaska @HilcorpAlaska https://t.co/QwLeZi4nsq pic.twitter.com/CySGZH4vJr

— energyvoicenews (@EnergyVoiceNews) April 27, 2020

8.30am: Solid early gains

The FTSE 100 began what is expected to be a busy trading week firmly on the front foot, buoyed by Japans bond bail-out announcement that also lifted Asias main markets.

The index of UK blue-chips opened 77 points higher at 5,829.00.

Sentiment was aided by a belief the later-affected areas of the world such as Europe and the US are past peak pandemic.

Here at home, it is the first day back to work for Prime Minister Boris Johnson after his near-death encounter with coronavirus.

There is a suggestion in the press Monday morning he may be minded to modify lockdown protocols rather than lift them; the aim being to allow certain businesses to begin trading.

“Attention will be on him, and in particular the government more broadly, to announce some sort of pathway out of lockdown, as it becomes increasingly apparent of how much economic damage is being done to the UK economy,” said Michael Hewson of CMC Markets.

The insurers Legal & General (LON:LGEN) and Aviva (LON:AV.), whose fortunes are tightly hitched to the market, were marked up early on, reflecting the rise of the Footsie. Both advanced 5.1%.

Elsewhere, British Airways owner IAG (LON:IAG) was up 4.8% amid hopes the furlough scheme will be extended further and that there may additional bailout measures for beleaguered UK carriers.

Ashtead (LON:AHT) stock rose 3.8% after the plant hire groups 'cash optimisation' proposals were roundly applauded by the market.

There appeared to be a knock-on benefit for building supplies giant Ferguson (LON:FERG), which similar to Ashtead, has significant US exposure. Its shares were up 4.7%.

Finally, the market welcomed builder Redrows (LON:RDW) return to work with a 7.4% mark-up to the share price.

Proactive news headlines:

Columbus Energy Resources PLC (LON:CERP) has confirmed new discoveries as it announced results from the hotly anticipated Saffron well located in the South West Peninsula, onshore Trinidad. Drilling began in October and testing took place in February. Saffron was drilled down to 4,634 feet and it encountered some 2,363 feet of gross sands across six intervals of interest (with net-to-gross stated at 47%). Oil discoveries have been confirmed in the Lower Cruse and Middle Cruse formations, Columbus said in a statement. Six intervals have been earmarked for testing, and, three have been done to date – two in the Lowe Cruse and one in the Middle Cruse.

Partners Aminex PLC (LON:AEX) and Solo Oil PLC (LON:SOLO) have announced an extension of the Ruvuma licence by Tanzanias Ministry of Energy by one additional year, commencing April 17, 2020. Importantly, the extension was one of the last remaining conditions required for Aminex to complete a farm-out transaction with ARA Petroleum. It is expected that the partners will acquire 200 square kilometres of 3D seismic (estimated gross cost of US$7mln) and drill the Chikumbi-1 exploration well (at least US$15mln). These programmes are expected to provide key inputs into an application for a development licence for the Ntorya project area.

Tiziana Life Sciences PLC (LON:TILS) (NASDAQ:TLSA) said it has acquired the slow release version of an antibiotic drug used to treat cancer and which could be deployed in the fight against coronavirus (COVID-19). The nano-particle formulation Actinomycin D, or Act, was developed by Dr Kunwar Shailubhai, the companys chief executive, during his time at Rasna Therapeutics. Tiziana is handing over to Rasna an initial US$120,000 and will make additional milestone payments of up to US$630,000.

Union Jack Oil PLCs (LON:UJO) has said it's West Newton A-2 well, which is located onshore, north of the River Humber in East Yorkshire has been given the green light for a testing programme. In a statement, Union Jack said a positive decision document has been issued by Environment Agency to well operator Rathlin Energy. Union Jack holds a 16.665% interest in the well, which will now be advanced with Rathlin approved to use mechanical methods (pumpjack/nodding donkey) for testing.

Faron Pharmaceuticals Oy (LON:FARN) (NASDAQFIRSTNORTH:FARON) has said it is donating interferon beta-1a drug supplies to treat 2,000 patients taking part in a globally crucial coronavirus (COVID-19) study. The World Health Organisation's Solidarity trial is assessing four drug options, including the Faron candidate, known as Traumakine, in combination with the HIV drug lopinavir. They will be compared with the current standard of care to assess efficacy. Faron believes its interferon beta-1a drug may help protect against serious lung complications.

CentralNic Group PLC (LON:CNIC) has said trading in the first quarter of 2020 was in line with expectations despite the spread of the coronavirus (COVID-19) as it reported record 2019 results. The provider of internet domain names and internet services also said it does not expect its business to be significantly hit by COVID-19. In its results statement covering the year ended December 31, 2019, CentralNic celebrated a record year with revenue up 95% to US$109.2mln from US$56.0mln in 2018; excluding the effect of acquisitions, revenue rose 61% year-on-year. Adjusted underlying earnings (EBITDA) were up 96% to US$17.9mln from US$9.1mln the previous year.

Greencoat UK Wind PLC (LON:UKW) has agreed to buy the South Kyle wind farm for £320mln from Vattenfall Wind Power. The consideration for the purchase will be due when the farm commences commercial operations, which is expected in the first quarter of 2023. South Kyle is located five kilometres to the east of Dalmellington on the boundary of Dumfries & Galloway and East Ayrshire in Scotland.

88 Energy Limited (LON:88E) (ASX:88E) has launched an all-paper takeover bid for XCD Energy, intending to create a consolidated Alaska-focused exploration company. XCD holds some 195,373 acres on the North Slope in Project Peregrine which would add to 88 Energys 480,000 acres which span across the Project Icewine and Yukon licences. The XCD assets are described as “attractive and complimentary”. 88 Energys unsolicited bid is worth A$7.5mln – the offer is 1.67 new 88 Energy shares per XCD share, plus 0.5 88 Energy shares per XCD listed option – and it already has the backing of major XCD shareholders accounting for 18.5% of the equity and 6.8% of the options.

Crossword Cybersecurity PLCs (LON:CCS) chief executive has predicted “a big year” ahead for the firm as it reported higher revenues for its 2019. For the 12 months ended December 31, the AIM-listed group posted revenue of £1.3mln, up from £1.07mln in the prior year, while its pre-tax losses fell to £2.1mln from £2.13mln. In the statement, Crossword's CEO Tom Ilube said the companys pipeline is currently standing at around £6mln, split between both its products and consulting services, and that these funds will allow the firm to drive business growth over the next 12 months.

ADM Energy Plc (LON:ADME) has told investors that operations at the OML 113 assets in Nigeria remain largely uninterrupted during the global coronavirus pandemic, with production levels remaining stable. In a corporate update, the company said it is “well-positioned to withstand current market volatility", with coronavirus (COVID-19) protection measures implemented to reduce the cost base. It also said it has secured finance for working capital purposes and has agreed to a two-month extension for a refundable deposit payment.

accesso Technology Group PLC (LON:ACSO) has said its current liquidity will support its operations into the autumn as it predicted customer demand at its client theme parks and attractions is “likely to rebound strongly” following the coronavirus pandemic. In a busiRead More – Source